A doji represents an equilibrium between supply and demand, a tug of war that neither the bulls nor bears are winning. All dojis are marked by the fact that opening and closing prices are almost same . There are 4 types of doji.
- Common Doji:
- is sign of indecision or reversal in the market.
- is more significant in up-trending market than in downward moving market.
- Long Legged Doji:
- has long upper and lower shadow.
- When close below the midpoint of the candle indicates weakness.
- Dragonfly Doji:
- occurs when price open at high and closes at high.
- looks like "T" with long lower shadow and no upper shadow.
- indicates that the sellers drove the prices lower, however at the end of session buyers pushed the prices back to the opening level and formed the shape of "T".
- Gravestone Doji:
- is bearish reversal pattern that mainly occurs in the top of uptrend.
- occurs when open and close near to the bottom of the trading session ( day's low price).
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